Will Demand Keep Cattle Prices Elevated Or Will Supply Push Them Down?

July 25, 2017 02:31 PM

Drought and dryness in the northern Plains hasn’t been enough to stop cattle growth, according to the mid-year cattle inventory numbers from the U.S. Department of Agriculture (USDA).

The total herd is now 4 percent bigger than last summer at 103 million head, the largest number of cattle in nearly a decade.

Beef cow numbers are 7 percent higher, although replacement heifer numbers are actually down compared to 2016. Some analysts are saying the numbers show the beef cow herd expansion is leveling off.

According to Naomi Blohm, senior market advisor for Stewart-Peterson, the charts are supporting the cattle market, which has been holding since October.

“Demand has been good, but there is this expected supply coming down the road that’s going to be larger,” she said. “You’ve got the market at this teeter totter point where it’s trying to decide who’s going to win: demand that’s keeping us up or is the oversupply potentially going to push prices lower.”

Hear why Blohm is advising cattle producers to have a “plan b” on AgDay above.

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